The exchange rate of the new single currency will be set at 24 Cuban pesos per US dollar.
The Cuban authorities decided to abandon the dual monetary system. Effective January 1, 2021, the Cuban Peso (CUP) and the Cuban Convertible Peso (CUC), currently in use at the same time, will be merged. This was announced by Cuban President Miguel Diaz-Canel on Friday, December 11.
The exchange rate of the new single currency will be set at 24 pesos per US dollar. Currently, the CUP rate is 25 pesos to one dollar, and the CUC rate is one peso to one dollar.
It is known that the dual currency system is a unique feature of Cuba, which existed for 26 years. The inhabitants of the island use Cuban pesos; convertible pesos are used mainly in the tourism industry. Government employees also receive a portion of their salaries in convertible pesos, which are considered hard currency and offer several benefits.
The unification of both Cuban currencies had been planned for a long time, but economic reform did not advance. This was primarily due to the fear of uncontrolled hyperinflation.
Earlier it was reported that the US dollar fell to a two-year low. This came amid optimism about talks to stimulate the US economy, bets on the successful introduction of vaccines against COVID-19, and the recovery of the Chinese economy.